HBA-TYH C.S.H.B. 3020 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3020
By: Smithee
Insurance
4/16/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, health maintenance organizations (HMOs) are not subject to an
existing Texas law that requires insurance companies to file withdrawal
plans with the Texas Department of Insurance (department)  before exiting
the Texas market.  The statute relating to withdrawal plans helps to
stabilize the Texas insurance industry by protecting against abrupt market
disruptions which may result if insurers haphazardly leave the state.  The
statute protects consumers, requiring insurers to continue to service their
Texas business in an orderly fashion and maintain a Texas presence until
their claims are fully paid.  The state allows the commissioner of
insurance, after notice and hearing, to require that a deposit be
maintained in this state if there is reasonable cause to believe that the
interests of the public are best served by such a deposit. 

The exclusion of HMOs from the withdrawal plan statute is a concern because
the Texas HMO industry has been suffering substantial losses.  On an
industry-wide basis, HMOs operating in Texas have consistently lost money
every quarter for several years.  No protection currently exists to pay the
claims of an HMO that goes into receivership.  C.S.H.B. 3020 subjects HMOs
to existing Article 21.49-2C, Insurance Code, requiring HMOs to file
withdrawal plans with the department before exiting the state. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 20A.26, Insurance Code (Texas Health Maintenance
Organization Act), to provide that a health maintenance organization  (HMO)
authorized under this article is subject to Article 21.49-2C (Withdrawal
Plan), Insurance Code, requiring an HMO to file withdrawal plans with the
Texas Department of Insurance before exiting the state, and is an
authorized insurer for the purposes of that article.  Makes conforming
changes. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original bill in SECTION 1 by providing that an
HMO authorized under this article (Texas Health Maintenance Organization
Act) is an authorized insurer for the purposes of Article 21.49-2C
(Withdrawal Plan), Insurance Code.